Sale consolidates Reno Creek uranium assets

03 November 2017

Energy Fuels is to sell its North Reno Creek uranium project in Wyoming to Uranium Energy Corporation (UEC) for $5.39 million. The property is adjacent to the fully permitted Reno Creek project acquired by UEC earlier this year and the sale consolidates UEC's position in the region.

UEC is to acquire 100% of the North Reno Creek properties under a definitive purchase agreement with Energy Fuels' wholly owned subsidiary Uranerz. North Reno Creek falls within UEC's existing permitting boundary at Reno Creek, allowing for integrated development. With previously reported NI 43-101-compliant measured and indicated resources of 4.3 million pounds U3O8 (1654 tU), North Reno Creek increases Reno Creek's combined resource by 20%, UEC said. The company plans to complete the necessary work to incorporate the North Reno Creek resource estimate into the Reno Creek project and complete an updated technical report under NI 43-101 by 2018, it said.

UEC completed the transaction to acquire the fully permitted Reno Creek project from private equity firm Pacific Road Resources Funds in August. The latest acquisition removes property boundaries and will allow UEC to optimise its mine plan, the company said, with significant synergies in co-developing the North Reno Creek and Southwest Reno Creek resource units. These are the first units expected to be developed in the project area.

UEC president and CEO Amir Adnani, said the company expects "by next year" to complete a new and optimised pre-feasibility study for the consolidated project.

"Development of this strategically important [in-situ leach, ISL] asset can now move forward in the most efficient manner - as a single combined project, with shared infrastructure, processing and operating facilities," he said.

Lakewood, Colorado-based Energy Fuels operates the Nichols Ranch ISL project in Wyoming, as well as the USA's only operating conventional uranium mill, White Mesa in Utah. The company last year set out a revised business plan prioritising development of its high-grade Canyon uranium mine in Arizona, and yesterday said it considered the North Reno Creek properties to be non-core to its current and future uranium operations.

"As a standalone project, these properties would require extensive permitting and licensing work, and significant time and capital, for Energy Fuels to bring them into commercial operation in the future. Therefore, they are much better suited to be combined with UEC's Reno Creek Project," the company said.

Its other low-cost ISL uranium properties in Wyoming, including Nichols Ranch and the fully-permitted Jane Dough and Hank properties, could be brought into production "much sooner", the company said. The North Reno Creek sale will not impact on those or Energy Fuel's other ISL properties in Wyoming's Powder River Basin - West North Butte, North Rolling Pin, and the Arkose Mining Venture - it added.

Energy Fuels CEO Stephen Antony said the proceeds from the sale would enhance his company's capital position.

"At a time when companies are experiencing weak uranium markets, we are pleased to realise significant value from non-core uranium properties that are not a part of Energy Fuels' long-term business plan," he said.